1. Field of the Invention
The present invention relates generally to financial services, and more particularly to systems and methods for generating revenue from banking transactions using a stored-value card.
2. Description of the Prior Art
Customers use automatic teller machines (ATMs) to conduct banking transactions such as deposits, withdrawals, balance inquiries, and transfers between traditional bank accounts. ATMs require ATM/debit cards with associated Personal Identification Number (PIN). Some ATMs charge service fees for withdrawals. Some service fees are calculated from increased exchange rates for foreign currency conversions. One problem with ATM/debit cards is that a bank customer must physically go to a branch of a bank to set up a traditional bank account because ATM/debit cards have a traditional bank account, such as a demand deposit account (DDA), associated with it. The bank typically checks the customer's identity based on their driver's license or other documentation and collects personal information such as address, date of birth, and Social Security number. Banks need to verify identification to prevent fraud and/or improve security for the customer's banking transactions. Furthermore, there may be government regulations that require proof of identity before using bank accounts to prevent illegal activities such as money laundering and funding of terrorist activities.
Another problem is that the funds deposited into an ATM machine are not immediately available for withdrawal. For example, if a customer deposits cash or a check in a deposit envelope, the deposited amount is not immediately available until a bank employee services the ATM machine to collect and process the deposits.
Customers have also used credit cards for banking transactions. One problem with credit cards is that a person usually needs to have good credit to have a credit line issued for a credit card. Another problem is that credit cards can take weeks to issue from a bank. After receiving and approving a credit card application, the credit card is then mailed to the person's address.
Another problem relates to a large population of US residents (by some estimates as much as 50 million) that are poorly served by the banking system—the “under-banked” or the “unbanked”. This population is generally excluded from traditional banking products (checking accounts, credit cards, debit cards) or moves in and out of eligibility for them—as banks offering them generally require good credit and/or unreasonably large security deposits in order to obtain these services. People may be excluded for any number of reasons such as having unfortunate circumstances like a divorce or serious medical problem adversely impact their credit standing, or such as making mistakes with their credit coming out of college leading to poor credit or a bankruptcy, or such as having no established credit history because they are a recent immigrant or someone who chooses to conduct their financial affairs primarily with cash. The reason banks generally exclude these groups of people from their service offerings is the cost and risk associated with the products, particularly credit cards and checking accounts. Therefore, these people may be excluded from certain financial transactions that require credit cards or debit cards. In one example, a person without a credit card cannot make purchases over the Internet, buy products from a catalogue, reserve a hotel room or rental car, purchase airline tickets, or even rent a movie, which may require a credit card. Thus, there is a need to provide convenient, cost-effective, lower risk financial services to this population.
In one prior art solution provided by 7-Eleven, a VCOM kiosk provides banking transactions such as money transfer, printing checks, and check cashing based on a deposited amount. However, a customer must also interact with a cashier in addition to the VCOM kiosk to perform the banking transactions. Also, the card associated with the VCOM kiosk is only used for identification purposes. Other kiosks manufactured by Blackstone issue cards, but the cards are calling cards.
Stored-value cards typically have been used for providing payment for goods or services after a user has deposited money into the stored-value card. For example, stored-value cards have been used as gift cards and as cards that provide payment for coffee or copies.